Three major policy priorities to rebuild economy
Finance and Media Minister Mangala Samaraweera yesterday said the government is looking forward to and focusing on rebuilding and re-positioning the island with three major economic policy priorities.
The priorities being, ensuring the continued access to global capital markets at an affordable rate to enable Sri Lanka to re-finance external debt this year; uplifting economic growth through Enterprise Sri Lanka and Gampereliya; and continuing our reform programme to build competitiveness of the economy.
Speaking at the inaugural meeting of the Breakfast Buzz series organized by the American Chamber of Commerce (AmCham) at the Colombo Hilton last morning, he said, a lot of work has been done to ensure the first priority. “A key element of this would be the continuation of the IMF programme which will signal to markets our continued commitment to disciplined, rules based economic management. The IMF staff mission is in Colombo this week continuing negotiations with officials of the Treasury and the Central Bank. Our objective is to ensure responsible fiscal policies whilst enabling space to invest in targeted growth supportive measures.”
Expressing views on the second priority he said, “Enterprise Sri Lanka is a programme to support private investment in small business, start-ups, and drive entrepreneurship. Sri Lanka has for too long relied on hand outs and artificial consumption booms to drive growth.”
“These are unsustainable measures that have repeatedly resulted in balance of payments crises. Enterprise Sri Lanka will drive growth through private investment and expand economic capacity for future growth. We have already seen over Rs. 70 billion in new credit disbursements going into SME exports, agriculture, and the service economy.”
In parallel, Gampereliya is a rapid rural infrastructure investment programme. The need of this was highlighted due to the droughts that adversely affected cash flows into the rural economy. By October 2018 Gampereliya was fast tracking investment into rural roads, small markets, and irrigation – and importantly putting cash back into the hands of the rural economy. This is no doubt one factor that supported the recovery of consumption in the fourth quarter of last year. In fact given the success of Gampereliya, one of the first actions of the illegal government was to halt the Gampereliya programme by a cabinet decision. We have now resumed the programme with renewed vigour.”
Having stabilized the economy, the Minister said, he is confident that the twin programs will support economic growth and consumption – which will in turn drive consumption growth and help all business activity as well.
The third priority is to continue reforms to enhance productivity and competitiveness. As a result of the government’s effective initiatives, s Sri Lanka moved up 11 places in the Doing Business index last year.
Minister Samaraweera added, “There is a lot more to be done but it is clear that we are on the right path. We will continue to build competitiveness by liberalizing the economy where we see excessive controls and costs.” He also said major future plans on investments on training and skills development will be announced through the Budget 2019 next week. “We will work closely with the private sector in building relevant skills.”
He assured the government’s policy initiatives are built on the spirit of the title of the session – “crafting and implementing evidence based policies.” “Gampereliya for instance includes investments in irrigation to improve climate resistance and reduce vulnerability of the rural economy. It includes investments in rural roads and markets to improve connectivity and integration into value chains that can uplift sustained income generation.”
“We are also implementing a rules based economic framework that will create confidence in the sustainability of the policy outlook. The Inland Revenue Act for instance is an important piece of legislation that reduces individual discretion and builds in predictability. The same applies to a market based fuel pricing mechanism. We will explore similar practices in other areas that help instil certainty and predictability. And we will continue to consult with industry in policy implementation and provide the necessary time frames for industry to adjust to such measures.”
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Mangala Samaraweera would have made a better impression on the IMF delegation if he had made arrangemnts to serve them with kurakkan pittu with polkiri (cocnut milk) and katta samba, for his words would not have made no impression when he probably enunciated his 3 major economic policy priorities.
For a policy that is credible there must be reliable statistic not something panned out by the fictitious data generated by the coomaraswamy of the central bank.
The IMF is blind to the past proposals, blind to progress in the past and blind to progress made. It is likely that this breakfast meeting was nothing more than a farce, staged to humor Mangala Samaraweera and his taff. With a bankrupt economy it is preposterous to speak of a fiscal policy It is doubtful that the IMF is blind to considering the history of scandals associated with the Central Bank.
Three generations of involvement with the IMF has done little to promote development the plantation industry is on the verge of collapse, agriculture remains subsistence and peasants are destitute and with little investment they are well and truly trapped in the poverty cycle with no muscle to engage in enterprise.
Droughts and floods are perennial problems and little have been done to alleviate the problems. There is no data about potable water. electricity, health schooling. with no revenue coming from subsistence no investment. the concomitant inflation associated is not deeply affected because of the resilience of subsistence. as to how mangala is to resolve associated complexities oought to boggle his mind let alonf brag about
at the end of the buzz meeting he has reconciled him from the fact to the extent he feels the economy has been stabilized by then the delegation must be having their thoughts on somewhere in the pacific lke tuvalu..i had a friend he claimed it to a beautiful place with a population of about 4000 then about 40 years ago
That is excellent commentary, Sama.
70 years of misrule has produced a failed state with an economy and society in tatters.
The only thing to be ‘proud’ of is a thriving drug trade.
Politicians and Public servants, Police force, Armed forces, Business leaders, all corrupt to the core.
Torture, extra-judicial killings and war crimes are the foundations of governance.
The current Government took the international community for a ride and is borrowing to pay off loans.
The King came from nowhere to become the 3rd richest in the country in 2 years of office.
The ex-King is the richest in the country.
We are a failed state; majority of the 25 million pouplation have been abused by the leadership.